Mr Paul Cheung Kwok Wing, Chairman of the Company said: "Having rallied as a team against a challenging business environment, we concluded another landmark performance for 2007 with both record-breaking revenue and profit. During the year, we have further strengthened the growth platform across our core businesses and scaled up our production capabilities. The strong results are a solid testament to our persistent focus on sustainable growth following the successful implementation of our business model of vertical integration and diverse revenue sources. Leveraging on the premier position in the market place, our laminate and printed circuit board ("PCB") divisions continued to advance market share and make positive contributions to the Group. The Group's chemical division posted impressive growth of 150% in earnings contribution over 2006 after accounting for the share of profits of our Hainan methanol joint venture. This clearly demonstrates that our chemical investments have started to bring in excellent returns. We have unwavering confidence in the Group's ability to shape the future as we have all the right ingredients in place to drive long-term sustainable growth and create ever increasing value for our shareholders."
Revenue (including inter-segment sales) for the laminate division recorded a 25% growth to HK$10,276.2 million. Earnings before interest and tax ("EBIT") was up 18% to HK$2,126.8 million over the previous year. In view of fast growing PCB demand in emerging markets including China, the Group will continue capacity expansion at the laminate plants in Fogang, Guangdong province and Jiangyin, Jiangsu province to bring total laminate monthly production capacity to 11.3 million sq. meters, up 9.3% by the end of 2008. To capitalise on the broad customer base with diverse product requirements, the Group is continuously developing high end laminate products including thin and high performance laminates.
The computer market rebounded sharply in the second half of 2007, together with steadily growing automotive and consumer electronic sectors, revenue for PCB division was up by 14% to HK$ 7,601.2 million. The Group's major expansion focus in the current year will be two high density interconnect ("HDI") PCB plants currently under construction in Kaiping, Guangdong province and Kunshan, Jiangsu province. Both plants are expected to be fully operational by year end of 2008. These new production facilities will address the untapped segments and hence add new momentum to the growth for the PCB division in due course.
Revenue of chemical division soared 35 % to approximately HK$5,425.7 million and EBIT increased 92% to HK$658.1 million in 2007. The coke/methanol plant in Hebei province excelled in its performance with EBIT surging 102% against 2006 because the ongoing coke industry consolidation in China has created a favourable operating environment for suppliers. The Group's new natural gas based methanol plant in Chongqing which commenced production in September 2007 contributed positively to the Group after some initial teething problems. The caustic soda plant in Hengyang, Hunan province also saw substantial earnings growth as a result of robust domestic demand. The new phenol/acetone plant in Huizhou, Guangdong province which started production in December 2007 created another growth dimension to the expanding chemical division. The joint venture with China BlueChemical Limited yielded excellent return to the Group's investment in spite of temporary disruption of natural gas supply in late 2007.
Chemical division continues to be the strongest growth driver for the Group in coming years. The methanol demand in China is expected to grow robustly in the near future as the central government is interested in clean and alternative fuel to reduce pollution and reliance on crude oil import. The Group gains valuable know-how and experience from the successful coke / methanol project in Hebei. The Group will complete three more coal based methanol projects with total new monthly capacity of 34,800 tonnes during 2008, namely, phase two of the coke / methanol plant in Hebei province and the two joint venture coke gas based methanol projects in Shanxi province. Phase three of the caustic soda plant in Hengyang, Hunan province will commence operation in the first half of 2008, providing 8,300 tonnes new monthly capacity each of caustic soda and polyvinylchloride ("PVC").
Mr Cheung concluded: "2008 marks the 20th anniversary of the Group and 15th anniversary of its listing in Hong Kong. With an excellent growth track record, we are confident that the competitive advantages gained in the past will enable the Group to seize new opportunities and continue to invest for sustainable growth. Although the recent slow down in the US economy has posted a challenge to the entire manufacturing sector, we believe, in light of our financial strength and well balanced business portfolio, the Group will continue to create shareholders value and, similar to other downturns in the past, make further advancement against our competitors.
Financial Highlights| Year ended Dec 31, | ||
| 2007 | 2006 | |
| HK$'million | HK$'million | |
| Turnover | 20,025.1 | 16,773.3 |
| Profit before tax* | 3,557.5 | 2,715.6 |
| Net profit attributable to shareholders* | 2,618.7 | 2,187.4 |
| Basic Earnings per share* | HK313.9 cents | HK275.6 cents |
| Full-year dividend per share | HK100.0 cents | HK58.0 cents |
| - Interim dividend per share | HK30.0 cents | HK20.0 cents |
| - Proposed final dividend per share | HK70.0 cents | HK38.0 cents |
| - Special dividend per share | Nil | HK62.0 cents |
* Excluding:
2007 ¡V
(1) gain on fair value change of conversion and redemption option derivative of HK$182.4 million
(2) loss on disposal and deemed disposal of interest in an associate of HK$23.7 million
(3) discount on acquisition of HK$1.0 million
2006 ¡V
(1) gain on disposal and deemed disposal of partial interest in a subsidiary of HK$ 4.8 billion
(2) discount on acquisition of HK$ 49.7 million
About Kingboard Chemical
Kingboard Chemical Holdings Limited (HKEx: 148) is a global leader in laminate and printed circuit board as well as a major chemical supplier in China. The Group¡¦s core manufacturing capability comprises an integrated network of more than 55 plants in China. The Kingboard Group of companies also includes Kingboard Laminates Holdings Limited (HKEx: 1888), Kingboard Copper Foil Holdings Limited (listed on the Singapore Exchange) and Elec & Eltek International Company Limited (listed on the Singapore Exchange).